US EV stocks are sliding in early trading after Morgan Stanley hit the sector with a trio of downgrades. Rivian $RIVN ( ▲ 8.63% ) , Lucid $LCID ( ▲ 2.62% ) , and Tesla $TSLA ( ▼ 0.2% ) were all in the red Monday morning as the bank flagged a more challenging demand environment.
Analyst Andrew Percoco lowered Rivian from “equalweight” to “underweight” and cut his price target to 12 dollars, which sits roughly one-third below Friday’s close. He pointed to slowing EV adoption as tax credits phase out and raised concerns that Rivian’s upcoming R2 SUV may cannibalize demand for its existing lineup.
Lucid also landed on the wrong side of the call. Morgan Stanley moved the stock to “underweight” and trimmed its target to 10 dollars from 30 dollars. That level would mark a new all-time low for the luxury EV maker, and Percoco noted the risk of further dilution as the company raises the cash it needs to keep operating.
Tesla rounded out the downgrade list. The bank shifted the stock to “equalweight,” saying investor expectations around AI have become too high. Even so, Morgan Stanley raised its price target to 425 dollars, reflecting ongoing strength in Tesla’s tech and software ambitions.